Group 1: Investor Relations Activities - The investor relations activity was conducted online on September 15, 2025, from 15:00 to 17:00 [1] - The meeting was attended by the General Manager and Financial Officer, Ding Xingxian, and Board Secretary, Liu Mingshan [1] Group 2: Production and Product Development - Lululemon Plant Drink (Chun'an) Co., Ltd. is expected to commence full production in 2026 [2] - The company is focusing on product diversification, with the almond milk series currently accounting for 94.2% of revenue [2][3] - New products such as Lululemon Plant Health Water and LOLO Sparkling Water are being developed to meet diverse consumer needs [2] Group 3: Share Buyback and Financial Management - The company plans to complete the share buyback within 12 months after the shareholders' meeting approval, with no delays expected [2][6] - The company has lent 3.16 billion yuan to its major shareholder's financial company at interest rates ranging from 0.35% to 3.4%, which is lower than the bank loan rate of 2.2% [3] - Management expenses have increased due to the 2024 restricted stock incentive plan and employee stock ownership plan [4] Group 4: Market Challenges and Strategies - The company is enhancing brand promotion and exploring new channels to boost distributor confidence amid a challenging beverage industry [4] - The company is committed to timely disclosure of share buyback progress and will consider suggestions for advertising redesign [4][5]

Core Viewpoint - Chengde Lulux (000848) reported a decline in performance in its semi-annual report, facing challenges in the almond milk market and struggling to diversify its product line amidst increasing competition in the beverage industry [1][2]. Financial Performance - In the first half of the year, Chengde Lulux achieved revenue of 1.384 billion yuan, a year-on-year decrease of 15.3%, and a net profit of 258 million yuan, down 11.97% [2]. - This marks the first revenue decline in nearly five years, with previous revenues recorded at 1.36 billion yuan, 1.462 billion yuan, 1.494 billion yuan, and 1.634 billion yuan from 2021 to 2024 [2]. - The company’s sales channels include dining, modern retail, traditional retail, events, group purchases, and online channels, with a focus on offline sales [2]. Sales Channels and Distribution - Direct sales revenue increased by 5.57% to 119 million yuan, while the more significant distribution channel saw a 16.85% decline, with revenue of 1.265 billion yuan [2]. - The number of distributors decreased to 909, down by 13 compared to the previous year [2]. Product Performance - Sales volume of almond milk decreased by 19.44% to 126,100 tons in the first half of 2025, while production volume only slightly decreased by 0.77% [3]. - Almond milk inventory increased by 42.33% due to the disparity between sales and production [3]. - The company’s plant protein beverage production capacity is designed for 500,000 tons, but only 135,500 tons were utilized in the first half of the year [3]. Product Development and Innovation - Chengde Lulux continues to focus on its core product, almond milk, which generated 1.304 billion yuan in revenue, down 17.67% [4]. - New product launches include herbal health water and sparkling water, aiming to diversify the product line and meet consumer demand [4][5]. - The company is also developing a series of herbal drinks to enhance brand competitiveness and appeal to younger consumers [5]. Marketing and Brand Strategy - Marketing expenses increased by 2.93% to 281 million yuan, with advertising costs accounting for 60.1% of this total [8]. - The company is utilizing various channels for brand promotion, including social media and outdoor advertising, to engage with younger demographics [8]. - Leadership changes occurred with the resignation of the previous general manager, and a new general manager has been appointed to drive product innovation and sales [9]. Industry Trends - The herbal water market is emerging as a significant growth area, with expectations of a compound annual growth rate exceeding 88% over the next five years [6][7]. - The beverage industry is shifting towards health-oriented products, with companies increasingly focusing on functional health needs of consumers [7].

Core Insights - In the first half of 2025, the company reported a revenue of 1.384 billion yuan, a year-on-year decrease of 15.30% [1] - The net profit attributable to the parent company was 258 million yuan, down 11.97% year-on-year [1] Company Strategy - The company is focusing on plant-based products, aligning closely with market demand and consumer preferences [1] - Innovations include flavor development, packaging upgrades, and visual aesthetics, with new product launches such as LULU Plant-Based Health Water, LOLO Sparkling Water, and glass bottle almond milk [1] - The company aims to optimize product structure and diversify offerings to meet various consumer needs [1] Industry Performance - Revenue from plant protein beverages was 1.382 billion yuan, reflecting a year-on-year decline of 15.36% [1] - Revenue from other sectors reached 1.9712 million yuan, showing a significant year-on-year increase of 57.27% [1]